Table Moderately Large Corporation Consolidated Balance Sh Moderately Large Corp
ID: 2332144 • Letter: T
Question
Table Moderately Large Corporation Consolidated Balance Sh Moderately Large Corporatlon Consolldaed Balance Sheet in thousands except share data ASSETS Current assets Cash and cash equivalents Accounts receivable,net Inventories Prepaid expenses and other current assets Deferred income taxes.net 1369 1,008 1.489 157 427 876 481 126 Total current assets Property. plant and equipment, net Other assets 4,066 3.137 168 2950 2287 161 TOTAL ASSETS LIABILIES AND SHAREHOLDERS' EOUITY Current liabilities Accounts payable Accrved compensationand related costs Accrued taxes Current portion of long-term debt 429 104 132 89 754 242 98 141 Total curentiabilities 563 Long-term debt Total iabilities 3,384 2392 Shareholders' equity Common stock ($0.1 par value)-authorized. 4.000.000 shares: issued and outstanding. 3.500.000 Paid-in capital in excess of par Retained earnings 350 2,415 350 2 415 Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,987 3,006Explanation / Answer
A)
-Operating profit margin: (1522/8935) x 100= 17.03%
-Net profit margin: ($983 / $8935) x 100= 11%
-Operating return on assets: [1522/ (7371 + 5398 / 2)] x 100 = (1522 / 6384.50) x 100 = 23.84%
-Net return on assets: [$983/ ($7371 + $5398 / 2)] x 100 = ($983 / $6384.50) x 100 = 15.40%
-Return on Equity: [$983 / ($3987 + $3.006 / 2)] x 100= ($983 / $3496.50) x 100 = 28.11%
B)
According to text, operating profit margin means that for every dollar in net sales, the company will earn a percentage of net sales as a result of operations. The MLC earned 17 cents on every dollar of operating income. Net profit margin means that for every dollar in net sales, the company earns a percentage of net sales as a result of operations, paying interest, and taxes. The MLC earned 11 cents on every dollar of net income. Operating return on assets is the percentage of operating income that each dollar assets. The MLC generated 23.84 on every dollar of assets. Net return on assets is the percentage of net income that each dollar of assets generates. The MLC generated 15.4 on every dollar of assets. Finally, return on equity is the percentage of net income generated by each dollar of owner’s equity. The MLC generated 28.11 cents on every dollar of shareholder’s equity.
C)
In summary, Moderately Large Corporation’s operating profit margin and net profit margin has both increased. They still show that they have very good return on equity for the stockholders
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